SEC to investigate Tesla

Sometimes, it’s the most “innovative” companies that fall victim to botched communications.

Especially if they involving neglecting to share pertinent information with shareholders.

Following a fatal crash in May that involved a Tesla driver using the car’s autopilot feature, the Securities Exchange Commission must now determine whether the company should have disclosed the news to its investors.

Despite the investigation and multiple autopilot accidents, Tesla executives say they don’t plan to disable the feature.

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The accident that sparked the SEC investigation occurred on May 7, in Florida. It was the first instance of a fatality in a self-driving car.

Though Tesla informed the National Highway Traffic Safety Administration of the circumstances surrounding the crash, according to reports executives did not inform investors.

The NHTSA and the National Transportation Safety Board are investigating whether the autopilot feature poses a larger problem. The SEC is interested in whether the company communicated the details to investors.

From the Wall Street Journal:

The SEC is scrutinizing whether Tesla should have disclosed the accident as a “material” event, or a development a reasonable investor would consider important, according to the person familiar with the matter. The SEC’s inquiry is in a very early stage and may not lead to any enforcement action by regulators.

In response, Tesla’s PR team posted “A Tragic Loss” online.

The statement emphasizes that the incident was the first fatality in more than 130 million miles driven with the autopilot feature activated. It compared that stat to the average U.S. rate of one fatal crash every 94 million miles driven.

Tesla details the circumstances surrounding the crash and calls the NHTSA investigation “simply a preliminary evaluation to determine whether the system worked according to expectations.”

A statement about the driver was also included:

The customer who died in this crash had a loving family and we are beyond saddened by their loss. He was a friend to Tesla and the broader EV community, a person who spent his life focused on innovation and the promise of technology and who believed strongly in Tesla’s mission. We would like to extend our deepest sympathies to his family and friends.

Tesla did not specifically address the SEC investigation in its post.

A company spokeswoman did, however, issue a statement to the Wall Street Journal:

Tesla has not received any communication from the SEC regarding this issue. Our blog post last week provided the relevant information about this issue.

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